Kaufman v. Pittsburg & Castle Shannon Railroad, 217 Pa. 599

Kaufman v. Pittsburg & Castle Shannon Railroad

217 Pa. 599 | Pa. | 1907

Opinion by.

Mr. Justice Elkin,

The answer to the third proposition contained in appellant’s statement of the question involved will control all the material questions raised by this appeal. Does the charter of the defendant railway company authorize it to take the lease, the execution of which is sought to be enjoined by appellant, and if so, will the lease be held valid for that reason, even though the charter of the railroad company did not in express terms confer the power to enter into such a contract ?

The defendant railroad company is a corporation organized under the general railroad Act of April 4, 1868, P. L. 62, and by the special Act of February 21, 1872, P. L. 142, it is given the power to purchase and own real estate and mine coal therefrom. Under the Act of April 5, 1873, P. L. 546, it has the right to construct an incline plane. The learned court below has found as a fact that said railroad company was in August, *6071905, and had been for several years prior thereto, insolvent. Its coal property was valuable and was capable of being operated with profit, but the railroad had for a long period of time been operated at a loss of more than $3,000 per month. The railroad company, being desirous of relieving itself from the operation of the road, opened negotiations for the purpose of making a lease of the same for a term of years. Several meetings were held for the purpose of considering a proposition looking to a leasing of the railroad, and on August 24, 1905, the final meeting of the stockholders of the railroad company was held, at which 8,153 shares were voted in favor of the lease and sixty-six against it. The appellant voted fifty shares out of the total of sixty-six against the resolution. The learned court below has found as a fact that the lease was an advantageous one for the stockholders of the railroad company to make, and that there was no fraud or collusion in the transaction. Indeed, we do not understand that the learned counsel for appellant raises any such question on this appeal, but relies entirely on the legal proposition above stated.

The Pittsburg Railways Company derives all of its powers under the special Act approved May 25, 1871, P. L. 1170. This company is one of seven or eight corporations chartered by the legislatures of 1870 and 1871 which have been granted very broad and comprehensive powers. It is clearly within the power of this company to engage in the transportation of passengers and freight by land or water, for it is so expressly written in the act creating it. In section two it is given the power “to build, construct, maintain or manage any work or works, public or private, which may tend or bo designed to improve, increase, facilitate or develop trade, travel or the transportation or conveyance of freight, live stock, passengers and any other traffic, by land or water.” In section four it is given the power to purchase, make, use and maintain any works or improvements connected or intended to be connected with the works of said company, and to merge or consolidate or unite with said company the improvements, property and franchises of any other company.

It will be observed that this company is given the express power to merge, consolidate or unite with its works or business the improvements, property or franchises of any other com*608pany. It also has the power to purchase, malee, use and maintain any works or improvements of another company connecting or intended to be connected with the business of said company. When these general powers are considered in connection Avith the power to build, construct, maintain or manage any Avork or works, public or private, intended to improve, increase, facilitate or develop trade, travel or the transportation or conveyance of freight, passengers and other traffic by land or Avater, conferred by section two, there can be no doubt that the railways company had the power to enter into a contract of lease Avith the railroad company, under the terms of which it is to use and maintain the property of the railroad company for a term of years at a fixed annual rental agreed upon. It cannot be seriously questioned that the railways company under its charter has the poAver to build a railroad for another corporation to operate, nor can it be doubted that it has the power to build and operate a railroad for its own use, and it necessarily follows that if it can construct a railroad for another company to operate and can operate a railroad for itself, it can lease a railroad for its own use for a term of years. The poAver to purchase outright certainly includes the poAver to lease and operate for a definite term. The greater includes the lesser power.

It may be objected that the legislature was improvident in conferring upon this and the several other companies created by the special acts during the legislative sessions of 1870 and 1871, such omnibus powers, but this is a legislative and not a judicial question. In International Navigation Company v. Commonwealth, 104 Pa. 38; Hespenheide’s Appeal, 4 Pennypacker, 71; and Carothers v. Philadelphia Company, 118 Pa. 468, it Avas held that the rights and franchises granted by these special acts Avere a valid exercise of the legislative power. In the last case cited it Avas distinctly held that the power conferred was sufficiently comprehensive to authorize that particular company to engage in the production, distribution and supply of natural gas for fuel.

It seems to be conceded in the argument of the learned counsel for appellant that the .raihvays company has the general power to engage in the transportation of freight or passengers, but it is earnestly contended that the provisions of the *609acts of 1861 and 1870, requiring the railroads of a lessor and lessee to be “ connected,” should apply, and that the lines of the defendant railways company and railroad company do not have a physical connection, and for this reason the lease must fall. In this connection.it should be observed that the words “connected or intended to be connected,” in the act of 1871 which created the defendant railways company, are of much wider significance in the matter of acquiring connecting lines than are the provisions of the general railroad acts referred to. The question involved in this case has nothing to do with the rights or limitations of railroad companies under the general acts of 1861 and 1870. The defendant railways company, in so far as these general powers are involved, looks to the act of its incorporation and is not controlled by the acts referred to. Even under the railroad acts of 1861 and 1870 it has been held that the roads of the lessor and lessee need not bo so connected that the same cars shall pass from one road to the other without interruption, but only that they shall be so connected that a convenient interchange of passengers and freight is possible: Philadelphia & Erie Railroad Company v. Catawissa R. R. Co., 53 Pa. 20; Hampe v. Pittsburg & Birmingham Traction Company, 165 Pa. 468. However, it is unnecessary to discuss the question whether the lines of the two companies were so connected as to meet the requirements of the acts of 1861 and 1870, because the rights of the lessor and lessee in this case are controlled by the act of 1871, under which the lessee company was incorporated.

It is now urged, however, that even conceding that the railways company had the power to take the lease in question, the railroad company did not have the power to make it. This does not now seem to be an open question in this state, as it has been expressly held by this court that the power to take, expressly conferred upon the railways company, implies the power in the lessor company to make the lease: Pinkerton v. Pennsylvania Traction Company, 193 Pa. 229. In that case, the present chief justice, speaking for the court, said: “ Nor is there any weight in the objection that the passenger railway company had no power to lease its road. The power to take a lease is expressly given to the motor company, and the corresponding power in the passenger railway company, as owners, *610to give a lease, is necessarily implied. Without it, the grant in the act would be nugatory.” To the same effect are the cases in other jurisdictions: In re Prospect Park and Coney Island Railroad Company, 67 N. Y. 371; N. Y. & N. E. R. R. Co. v. N. Y., N. H. & H. R. R. Co., 52 Conn. 274; Hunting v. Hartford Street Railway Company, 73 Conn. 179.

From the rule stated in these cases it clearly appears that the railways company, under its act of incorporation having the power to enter into the lease with the' railroad company, and there being no limitation on the power of the railroad company to enter into the lease, and, therefore, no violation of any statutory requirement, it had an implied power to make the lease in question.

Decree affirmed.